Download 93 Marketing Analysis of Plantain in Owo and Ose Local

International Journal of Agricultural Economics & Rural Development - 1 (2): 2008
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Marketing Analysis of Plantain in Owo and Ose Local Government Areas of Ondo
state, Nigeria
*Oladejo, J. A. and W. A. Sanusi
Department of Agricultural Economics and Extension, lautech
Department of Agricultural Economics and Extension,
Ladoke Akintola University of Technology, Ogbomoso – Nigeria
*Correspondent author
e-mail: [email protected]
Abstract: This study analyzed plantain marketing in Owo and Ose Local Government Areas of Ondo State,
Nigeria. Systematic sampling technique was used in the selection of one hundred and ten plantain marketers in
the study area. A well structured interview schedule was the instrument used for data collection. Data collected
were analyzed using both descriptive and inferential statistics. The study revealed that most of the marketers
(70%) were female with mean age of 43years. Herfindahl index of 0.3 revealed that plantain market tends
toward pure competition. Costs and returns analysis showed that plantain marketing is profi Table in the study
area with monthly gross margin of N12,214.57 and benefit cost ratio of 1.43. The regression analysis revealed
that marketing costs and net returns are negatively related with R2 value of 0.52 and F – value of 21.478 which
is significant at 1%. The major marketing problem identified by the highest percentage of respondents is
finance. The study therefore recommends that plantain marketers should come together to form plantain
marketers cooperative groups from which members could obtain loans at very low interest rates.
Keywords: Marketing analysis, Plantain.
INTRODUCTION
availability of harves Table bunches from
Plantain is one of the most important staple
established areas makes it possible for the crop to
food crops for millions of people both in developed
contribute to all year round food security for
and developing countries, a fact reflected in the
consumers and income among marketers and
gross value of its production. It reaches its greatest
producers.
importance in parts of East Africa where annual
In Nigeria, four main types of plantain
consumption is over 200kg per capita and in West
are available with distribution strictly based on
and central African where more than 10 million tons
their bunch characteristics. These are; the horn
are produced annually and are traded locally
type, French type, false type and false horn type.
(International Institute for Banana and Plantain,
The false horn type is the most widely distributed
2001).
because of its ability to tolerate poor soil
The economic importance of plantain lies
conditions. The producing states include Ondo,
chiefly in its contribution to subsistence economy
Ogun, Osun, Oyo, Cross-river, Imo and Abia
(Olorunda, 1998). According to him, the continuous
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State (Wikipedia, 2007b; Robinson, 1996; Ndubizu,
the same platform of malnutrition. The study
1995).
therefore analyses the complexities of plantain
Plantain is found in the diet of many
marketing using Owo and Ose local government
of
areas as a case study. Idachaba (2000) claims that
carbohydrate no matter what form it is consumed. It
it is not sufficient for policy makers to concentrate
is also a good source of protein, mineral and
on solving production problems without reference
vitamins. It can be boiled and consumed directly or
to their marketing problems because even though
taken in convenient forms like Dodo (fried ripe
actual production may be adequate, marke Table
pulp), Chips (fried unripe pulp) or processed to
and marketed surplus may be inadequate and
produce such as plantain flour, local beer (plantain
unreliable. Plantain is a seasonal crop with
baby food), as well as Dodo Ikire (produced from
relative short shelf life hence, it is available for a
over-ripped plantain). Plantain also possesses
limited period and post harvest losses are very
medicinal properties.
high. These situations necessitate a scientific
Nigerian
families.
It
is a
good
source
It can be used to cure ailments like sore
survey of its marketing system. This study aimed
throat and tonsillitis, diarrhoea and vomiting. Soya
at providing answers to the following questions.
Musa is used in treating Kwashiokor (John and
i.
of plantain marketers?
Marshal, 1999; Frison and Shamrock, 1998). It is
used to clear mucous, treat lung conditions and ease
ii.
What are the marketing activities and
functions performed by plantain marketers?
bladder infection. In addition, plantain has been
found to be a powerful antitoxin used to neutralize
What are the socio-economic characteristics
iii. What is the structure of plantain market in the
study area?
poison. Externally it is used to stem bleeding and as
tropical anti-inflammation for dressing wounds and
iv. Is plantain marketing a profi Table business?
snake bites. Fermented plantain can be used as a
v.
What are the problems militating against
source of alcoholic drink. Further more, dried
plantain marketers?
plantain can be made into flour, which can be eating
Objectives of the study
with soup (Saturday Punch, 2007). Over the years,
The general objective of this study is to
plantain peel has been traditionally used to feed
analyse the marketing system of plantain in Ose
goats and sheep. These peels fresh or dry can be
and Owo local government areas of Ondo State.
processed into feed with little modification.
The specific objectives are to;
Due to the nutritional importance of
plantain,
venturing
into
its
enterprise
attention given to plantain is focused on its
production technology while only a few is done on
its marketing. It is obvious that increased production
without corresponding increase in marketing may
amount to wastage of resources leaving people on
identify the socio-economic characteristics of
the respondents in the study area,
holds
promising potentials. However, the relatively little
http://www.ijaerd.lautechaee-edu.com
i.
ii.
investigate the marketing functions and
practices of respondents in the study area,
iii. describe plantain market structure in the
study area,
iv. evaluate costs and returns to plantain
marketing in the study area,
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v.
identify the problems facing plantain marketers
and 5 were analysed by tables using frequency
in the study area.
counts, mean values and percentages. Objective 3
Hypothesis of the study
was achieved by computing the Herfindahl index
The hypothesis of the study stated in the
for the market and drawing inference from the
null form is as follows:
results. Objective 4 was achieved by calculating
Ho: There is no significant relationship between
the benefit cost ratio, gross margin and net returns
plantain marketing costs and net returns of
of respondents. Multiple regression analysis of the
respondents.
linearised cobb-douglas function was carried out
to test the stated hypothesis.
The formulas used in the analyses were
METHODOLOGY
The study is carried out in Ose and Owo
local government areas of Ondo State, Nigeria.
as follow:
(1)
The herfindahl index (HI)
Ondo state is one of the most popular states in
HI = ΣSi2
Nigeria with a total human population of 401,147
Where Si = Market share for respondent
(National Population Commission, 2006). The state
i, calculated as: Si = q i
falls under the rainforest vegetation zone with a
q
mean annual rainfall of 1500mm. It has an area of
Where qi = bunches of plantain sold per month by
14606km2 and lies on latitude 7010’N and longitude
respondent i
0
q = total number of bunches sold per
5 05’E of the equator. It has 18 local government
areas (Wikipedia, 2007a). The study was conducted
month by all respondents.
in Ose and Owo LGAs of the state purposively
(2)
The cost and returns analysis
Total cost (TC) = Variable cost (VC) +
because these areas are well known for plantain and
banana production. They as well produce cocoa,
fixed cost (FC)
Total Revenue (TR) = Price per bunch x
palm oil, cashew and timber.
Two major plantain markets were chosen
from the two LGAs i.e Ose and Owo agricultural
number of bunches sold
Benefit cost ratio (BCR) = Total Revenue
Total Cost
produce markets. The plantain marketers’ stalls
found in clusters within the markets were then
Gross Margin = Total Revenue – Variable Cost
numbered. Systematic sampling technique was used
Net Return = Gross Margin – Fixed Cost
i.e Total Revenue – Total Cost
to select the plantain marketers in every third stall as
respondents for this study. A total number of one
(3)
The Cobb – Douglas Regression Model
Log ϒ b0 + b1 + b2 logX2 …….. + b12
hundred and ten (110) formed the sample size for
this study.
A well structured interview schedule was
logX12
Where ϒ = Net return (Measured in Naira)
used to obtain needed information from the
X1 = Price (Naira)
respondents and the data were subjected to both
X2 = Labour cost (Naira)
descriptive and statistical analysis. Objectives 1, 2
X3 = Rent (Naira)
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X4 = Transport cost (Naira)
single, divorced or separated. This shows that
X5 = Age of respondent (Years)
only a few of them were not married. Marital
X6 = House hold Size (Actual number of household
status is therefore no barrier to involvement in the
members)
business. On the issue of household size, 4.5%
X7 = Purchase cost (Naira)
have less than three household members, 92.8%
X8 = Years of Plantain marketing experience
claimed between 3 and 8 household members
(Years)
while only 2.7% claimed to have above 8
X10 = Source of capital (Dummy)
household
X11 = Storage Cost (Naira)
respondents with large, medium and small
X12 = Level of Education (Years of Schooling)
household size were found in plantain marketing.
members.
This
revealed
that
Table 1 further revealed that 23.6% of
RESULTS AND DISCUSSION
the respondents had no formal education while the
Table 1 revealed the socio-economic
remaining were educated to some extent. The
characteristics of respondents. Thirty% of the
analysed data further showed that 73.7% of the
respondents were male while 70% of them were
marketers claimed to have between 11 and 30
female. This finding corresponds with Akalumbe
years of plantain marketing experience while the
(1998) that post harvest handling of plantain is still
remaining 12.7% and 3.6% claimed ten years or
within the domain of women while men are more
below, and greater than thirty years respectively.
involved with its production. The Table further
The average was found to be 16 years. On the
showed that most of the respondents (80.9%) fall
issue of major source of capital the respondents
between 31 and 50 years of age. The mean age was
use in financing their plantain business, more than
43 years. The implication of this is that most of the
half of them (68.2%) claimed personal saving,
respondents are in their active age when they have
followed by 26.4% who claimed to take loans
the ability of going about their business with vigour.
from different cooperative groups to which they
On marital status of respondents, the Table revealed
belong. Very few submitted that they borrow from
that 62.7% were married while 20.9% were
friends and relatives while 3.6% took bank loans.
widowed. The remaining respondents claimed to be
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Table 1: Socioeconomic Characteristics of Respondents
Socioeconomic Characteristics
Sex
Male
Female
Age
≤ 30
31 – 40
41 – 50
51 – 60
> 60
Marital Status
Single
Married
Divorced
Separated
Widowed
Household size
<3
3–5
6–8
>8
Level of Education
No formal education
Primary
Secondary
Tertiary
Adult Education
Years of marketing experience
≤ 10
11 – 20
21 – 30
> 30
Major Source of Capital
Personal savings
Friends and relatives
Cooperative loan
Bank loan
Total
Frequency
Percentage
33
77
30
70
5
34
55
12
4
4.6
30.9
50.0
10.9
3.6
2
69
10
6
23
1.8
62.7
9.1
5.5
20.9
5
36
66
3
4.5
32.4
60.4
2.7
26
62
10
11
1
23.6
56.4
9.1
10.0
0.9
14
72
20
4
12.7
65.5
18.2
3.6
75
2
29
4
110
68.2
1.8
26.4
3.6
100.0
Source: Field Survey, 2007
Table 2 showed that the marketers perform
1.8% opted for suburbs while 57.3 claimed that
transportation function, and in doing this, 99.5% of
they meet with their suppliers right in the market
them uses vehicles as means of transport while 2.7%
place. Data analysed showed that the marketers in
and 1.8% respectively opted for motor bikes and
carrying out their distributing function uses
headloads. Information collected further showed
diverse channels. About 10.9% claimed to supply
that the respondents perform storage function.
their wares in wholesales. The remaining 26.4%,
Analysis showed that 29.1% store their ware under
42.7% and 20% sell directly to the retailers, final
sheds, 57.3% store in rented shops while 13.6%
consumers
claimed to store right in their houses.
respectively. On the issue of labour type used,
and
processors/food
vendors
On the issue of plantain bulk purchase as
54.5% claimed to use family labour, 27.3 claimed
part of their marketing function, 40.9% of the
to use hired labour while 18.2% submitted that
respondents buy directly from the producers’ farms,
they combine both.
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Table 2: Marketing Functions and Practices
Variable
Transportation means
Vehicle
Motor bike
Head load
Storage facilities
Shed
Rented shops
Home
Purchase source
Farm
Suburb
Market place
Distribution channel
Wholesalers
Retailers
Consumers
Processors /food
vendors
Labour type
Family
Hired
Both
Sales (bunches sold
per month)
≤ 50
51 – 100
101 – 150
151 – 200
> 200
Total
Frequency
Percentage
105
3
2
99.5
2.7
1.8
32
63
15
29.1
57.3
13.6
45
2
63
40.9
1.8
57.3
12
29
47
22
10.9
26.4
42.7
20.0
60
30
20
54.5
27.3
18.2
10
13
22
45
20
110
9.1
11.8
20.0
40.9
18.2
100.0
marketers is very low, thus the market structure of
plantain tends toward perfect competition, which
is characterized by (1) The product sold is
homogenous, (2) There is no barrier to entry in to
the business (3) There are many buyers and sellers
in the study area.
The Costs and Returns analysis of
respondents revealed the following on per
monthly average basis:
Variable Cost (VC) = N22,262.11
This include transport cost + storage cost + labour
cost + cost of plantain purchase.
Fixed Cost (FC) = N1,874.30
This include transaction land rent + miscellaneous
Total Cost (TC = VC + FC) = N24,136.41
Total Revenue = N34,476.68
Benefit cost ratio (BCR) = Total Revenue
Total Cost = 34476.68
24136.41
= 1.43
Source: Field Survey, 2007
The business is very profi Table since the benefit
In order to determine the market structure
– cost ratio is greater than one. The BCR revealed
of plantain market in the study area, the herfindahl
that for every N1 invested into plantain business
index was computed making use of total sales
by the respondents, N1,43k is obtained.
(bunches of plantain) per month. Herfindahl index is
Gross Margin = Total revenue – variable cost
= N(34,476.68 – 22, 262.11)
calculated as:
Herfindahl index (HI) = ΣSi
2
Where Si = market share for respondent i, calculated
= N12,214.57 per month
Net Return = Gross Margin – Fixed Cost
= N(12214.57 – 1,874.30)
as: Si = q i
q
= N10,340.27 per month
Where qi = bunches sold per month by respondent i
The costs and returns analysis revealed
q = total no of bunches sold per month by
that on the average each plantain marketer in the
all respondents.
study area makes a profit of N10,340.27 per
Thus, the herfindahl index (HI) = ΣSi2
month.
= 0.3
Table 3 showed the major plantain
The highest value obtainable here is 1. A
marketing problems identified by respondents.
very low herfindahl index (0.3) obtained here
About 27.2% claimed that finance is the major
revealed that the concentration ratio for plantain
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problems confronting them, 20.9% opted for rapid
determined by regression analysis of the Cobb-
deterioration in quality nature of plantain, 25.4% for
Douglas functional form. The model is specified
high transportation costs, 9.1% submitted that price
as follows:
fluctuation
is
Log Y = b0 + b1 log X1 + b2 log X2 + b3 log X3 +
marketing.
The
a
major
problem in
remaining
12.7%
plantain
and
4.7%
……. + b12 log X12
identified pilfering and infestation of pests and
Where Y = Net return
diseases respectively as major problems.
X1 = Price, X2 = Labour Cost, X3 = Rent, X4 =
Table 3: Major Problems Identified
transport cost, X5 = Age, X6 = Household size X7
Major Problem
Finance
Rapid deterioration in quality
High transport cost
Seasonality (price fluctuations)
Pilfering
Pests and diseases
Total
Frequency
30
23
28
10
14
5
110
percentage
27.2
20.9
25.4
9.1
12.7
4.7
100.0
= purchase cost, X8 = quantity sold X9 = Years of
plantain marketing experience, X10 = Source of
capital X11 = storage cost, X12 = level of
education.
b0 = constant, b1…….. b12 coefficient of variables.
Source: Field Survey, 2007
The relationship between marketing costs
of plantain and net returns to marketers was
The result obtained is as follows:
Variable
Constant b0
Price (X1)
Labour cost (X2)
Rent (X3)
Transport cost (X4)
Age (X5)
Household size (X6)
Purchase cost (X7)
Quantity sold (X8)
Years of experience (X9)
Major Source of capital (X10)
Storage Cost (X11)
Level of Education (X12)
R2 = 0.520
F – value = 21.478 (0.0000) ***
The equation is thus written as:
Coefficient
1.245
0.747
0.027
-0.181
-0.185
0.105
-0.030
-0.214
0.237
0.223
0.017
0.010
-0.66
t-value
0.39
6.719
0.264
-1.949
-1.728
0.796
-0.275
-2.111
2.099
2.082
0.715
0.075
-0.548
Log Y = 1.245 + 0.747 log X1*** +0.027 log X2 + 0.181 log X3* – 0.185 log X4*+0.105 log X5– 0.030 log X6–
0.214 log X7**+ 0.237 log X8** + 0.223 log X9** + 0.017 log X10 + 0.010 log X11 – 0.66 log X12
N.B: *** significant at 1%, ** significant at 5%, * significant at 10%
Result of the analysis revealed that X1
(Price), X8 (quantity sold) and X9 (Years of plantain
each in X1, X8 and X9 will bring about one unit
increase respectively in respondents net returns.
marketing experience) are positively related to net
On the other hand, variables X3 (Rent),
returns. Thus, 0.747, 0.237 and 0.223 unit increase
X4 (transport cost) and X7 (purchase cost) were
found to be negatively related to net returns. That
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is, 0.181, 0.185 and 0.214 unit increase in each of
urban areas. This will help in getting the produce
X3, X4 and X7 will result in corresponding one unit
to market places in good time and in good shape
decrease respectively in respondents net returns. The
(quality). It will also bring about a reduction in
R2 value of 0.520 means that the estimated variables
transportation cost and hence the cost of
included in the model explained 52% of variation in
marketing.
net returns of respondents. The F –value of 21.478 is
also significant at 1%.
REFERENCES
Akalumbe, O. (1998). “Economics of Marketing
and Post-Harvest Losses in South-
CONCLUSION
From the findings of this study, it could be
Eastern Nigeria”. Unpublished M.Sc
concluded that plantain marketing is profi Table in
Thesis
the study area. Also, net returns to plantain
Economic University of Ibadan, Ibadan
marketing are affected by estimated plantain
Department
of
Agricultural
Frison, E. and Shamrock, S. (1998). The
marketing costs and selected personal characteristics
Economic,
of marketers. Finally, plantain marketing in the
Importance of Banana in the world.
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Montpellier Press, France
by finding lasting solutions to various problems
Social
and
Nutritional
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faced by the marketers.
(2001). Annual Report of Plantain in
Recommendations
West Africa
Based on the finding that finance is the top-
Idachaba, F.S. (2000) “Food Policy in Nigeria.”
most major problem facing the marketers, this study
Agricultural Research Bulleting. Vol. 1:
recommends that the marketers should come
162.
together to form plantain marketers cooperative
John, P and Marshal, J (1999). Ripening and
groups, from which members could obtain loans at
Plantain. Chapman and Hall, London. Pp
very low interest rates to finance their business.
434 – 467.
Such groups can also have a common warehouse
Ndubizu, T.O.C. (1995). “Plantain Production in
with adequate storage facilities and security, where
Southern Nigeria”. Recommendations of
members could store their plantains before they are
the
ready to be sold. This
will guard against
deterioration in quality as well as pilfering.
Based on the finding that marketing costs
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Role of Post Harvest Technologies in
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better market performance and profitability. The
Robinson, J.C. (1996). Plantain and Banana Crop
three tiers of government can do their own part by
Production Science in Horticulture Series
renovating existing bad roads and constructing new
5.
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Saturday Punch (May 26, 2007). Pp A18
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